Brazil’s base oil market may have had a down year in 2022, but it’s off to a healthy start in 2023, as domestic production and imports both rose year on year in January, according to the latest government data.
The country’s production of base oil – primarily API Group I – increased 8% compared to January of 2022, and its base oil imports jumped by 25% in January, a report by the National Agency of Petroleum, Natural Gas and Biofuels showed.
Domestic production was 48,000 metric tons for January, compared to 44,000 tons in the same month last year. Brazil imported 58,000 tons for the month, up from 46,000 tons.
For the full year 2022, domestic base oil output slid 7% while imports fell 20%. January’s results did continue am improving trend from the end of last year as domestic production and imports increased 16% and 100%, respectively in December.
Most of the base oil that Brazil imports comes from the United States, and most of that is Group II.
Before the COVID-19 pandemic struck in March 2020, Brazil imported volumes of base oil similar to what it produced, but while domestic output dropped during 2020, imports rose. Although the country still imports substantially more base oil than it produces, the gap between the two – base oil exports and production – narrowed in 2022. Last year, Brazil imported 770,000 tons of base oil, compared to 523,000 tons of domestic production, whereas in 2021, the country imported 997,000 tons and produced 549,000 tons.
Base oil exports from Brazil fell 28% to 8,000 tons in January, compared to 11,000 tons the same month of 2022.